[Audit Report on Internal Controls Over Cashier Operations,
Government of the Virgin Islands]
[From the U.S. Government Printing Office, www.gpo.gov]
Report No. 00-i-166
Title: Audit Report on Internal Controls Over Cashier Operations,
Government of the Virgin Islands
Date: January 3, 2000
**********DISCLAIMER**********
This file contains an ASCII representation of an OIG report.
No attempt has been made to display graphic images or
illustrations.
Some tables may be included, but may not resemble those in the
printed version. A printed copy of this report may be obtained
by referring to the PDF file or by calling the Office of
Inspector General, Division of Acquisition and Management
Operations at (202) 208-4599.
******************************
U.S. Department of the Interior
Office of Inspector General
AUDIT REPORT
INTERNAL CONTROLS OVER
CASHIER OPERATIONS,
GOVERNMENT OF THE VIRGIN ISLANDS
REPORT NO. 00-I-166
JANUARY 2000
N-IN-VIS-011-99-M
AUDIT REPORT
Honorable Charles W. Turnbull
Governor of the U.S. Virgin Islands
Office of the Governor, Government House
No. 21-22 Kongens Gade
St. Thomas, Virgin Islands 00802
Subject:Audit Report on Internal Controls Over
Cashier Operations, Government of the
Virgin Islands (No. 00-i-166)
Dear Governor Turnbull:
This report presents the results of our review of internal
controls over cashier operations at 12 agencies of the Government
of the Virgin Islands. The objective of our audit was to
determine whether Governmental cashiers/collectors complied with
policies and procedures established to provide an adequate level
of internal controls over collections and deposits of
Governmental revenues.
BACKGROUND
Pursuant to the responsibility authorized by Title 3, Section
177, of the Virgin Islands Code, the Department of Finance issued
the Government Accounting Manual, which includes policies and
procedures (Sections 310.1 to 310.10 of the Manual) to be used by
cashiers/collectors when they collect, deposit, and report
revenues on behalf of the Government of the Virgin Islands.
Governmental departments and agencies responsible for collecting
public funds are required to implement the procedures contained
in the Manual to facilitate better controls over collections and
deposits of Governmental revenues.
SCOPE OF AUDIT
The scope of the audit, which was performed during July and
August 1999, included a review of internal controls over
collections totaling $88 million made during May and June 1999 by
cashiers/collectors at the St. Thomas offices of the Bureau of
Internal Revenue; the Roy L. Schneider Hospital; the Virgin
Islands Lottery; and the Departments of Finance, Health, Labor,
Police, Planning and Natural Resources, Licensing and Consumer
Affairs, Agriculture, Public Works, and Human Services (see the
Appendix). Our audit also included unannounced cash counts at the
12 selected departments and agencies.
Our review was made, as applicable, in accordance with the
"Government Auditing Standards," issued by the Comptroller
General of the United States. Accordingly, we included such
tests of records and other auditing procedures that were
considered necessary under the circumstances.
Our audit included an evaluation of the internal controls over
the collection, deposit, and reporting of Governmental revenues.
Internal control weaknesses were identified in these areas and
are discussed in the Results of Audit section of this report.
Our recommendations, if implemented, should improve the internal
controls in these areas.
PRIOR AUDIT COVERAGE
The Office of Inspector General has not issued any prior audit
reports exclusively on cashier operations of the Government of
the Virgin Islands. However, during the past 5 years, the Virgin
Islands Bureau of Audit and Control has issued 10 audit reports
on the collection activities at specific departments and agencies
of the Government. Those audits disclosed internal control
weaknesses similar to those discussed in the Results of Audit
section of this report.
RESULTS OF AUDIT
Government of the Virgin Islands cashiers/collectors did not
comply with the policies and procedures established for
collecting, depositing, and reporting Governmental revenues.
Specifically, we found that (1) collections were not made
exclusively by employees designated to be collectors, (2)
collections were not properly documented and recorded, (3)
collections were not adequately secured, (4) bank deposits were
not made timely and were not reconciled to daily collections, and
(5) collection records and reports were not submitted timely to
the Department of Finance. Sections 310.1 to 310.10 of the
Government Accounting Manual contain the requirements for the
processing of collection and deposit documents. We found,
however, that these requirements were not always complied with
because the departments and agencies reviewed did not establish
adequate internal controls or provide sufficient oversight of
cashier operations, cashiers did not follow established controls,
and adequate numbers of assistant collectors were not always
designated or available. As a result, differences totaling
$42,232 existed between amounts collected and deposited during
May and June 1999, collections were at risk of misappropriation
and/or theft, and source documents were not always available to
the Department of Finance for the timely preparation of daily and
monthly revenue reports.
Designation of Collection Agents
Section 310.2 of the Government Accounting Manual requires that
collections be made exclusively by collectors and assistant
collectors approved by the Commissioner of Finance and specifies
the process for obtaining such approval. However, employees who
were not designated as collectors or assistant collectors were
accepting payments and issuing receipts as follows:
- The Department of Planning and Natural Resources had three
collectors at the Permits Division and one collector at the
Enforcement Division. However, two employees who had not been
officially designated as collection agents by the Department of
Finance were assisting the Enforcement Division's collector by
accepting collections and issuing receipts. We also found that
the Enforcement Division's collector went to St. John 2 days each
week during June of each year to collect annual boat registration
fees. During that time, the collector pre-signed batches of
blank receipt forms and left them at the Enforcement Division
office for issuance to individuals who came to make payments. If
the pre-signed receipt forms, which consisted of a white original
and yellow and pink file copies, were all used, the employees who
assisted the collector at the Enforcement Division issued
unsigned receipts to customers who made payments. Subsequent to
the issuance of unsigned white copies of the receipts, the
collector would sign the file copies of the receipts. We found
that the pink file copies of 55 receipts issued on June 22 and
23, 1999, were signed by the collector after returning from St.
John.
- The Maternal Child Health Division of the Department of Health
had a collector and an assistant collector. However, because the
assistant collector was on leave status through December 1999, an
employee of the Department's Family Planning Division made
collections when the collector was not available. This employee
was not designated as an assistant collector.
- The Community Health Clinic of the Department of Health had two
collectors. However, an employee of the Clinic who was not a
designated collector also had an assigned receipt book and had
collected $1,954 during May and June 1999.
We believe that Governmental departments and agencies should
ensure that employees who are assigned to make collections and
issue receipts on behalf of the Government are properly
designated as collectors or assistant collectors by the
Department of Finance in accordance with Section 310.2 of the
Government Accounting Manual. Additionally, supervisors should
ensure that collectors and assistant collectors are aware that
pre-signing blank receipt forms or giving unsigned receipts to
individuals who are making payments are inappropriate practices
in that they weaken the controls over collections.
Although the Department of Human Services routinely collected
license fees for the day care, preschool, and Headstart programs,
we noted that the Department did not have a designated collector
or assistant collector. The Department accepted only money
orders and certified checks from clients and submitted such
collections to the Department of Finance, along with Statements
of Remittance, for deposit and recording to the Government's
accounting system. This procedure was in accordance with Section
310.3 of the Government Accounting Manual, which requires
agencies that do not have a collector or an assistant collector
to prepare a Statement of Remittance and transmit it, along with
the funds collected, to the Department of Finance. However, we
believe that because the Department of Human Services routinely
makes collections, it should have at least one designated
collection agent.
Collection Procedures
To ensure the proper reporting of daily collections, the
Government Accounting Manual requires that collectors prepare
receipts, a listing of checks received, a Daily Summary of
Collections and Deposits, and Certificates of Deposit.[1] The
Department of Finance provided receipt books to collectors and
assistant collectors of central governmental agencies, while
autonomous agencies used their own official receipt forms.
Additionally, real property tax bills, income tax returns, and
motor vehicle registration certificates served as receipts when
they were properly stamped by the appropriate collector or
assistant collector. We reviewed these documents for collections
made during May and June 1999 at selected departments and
agencies and found that receipts were missing or were incomplete
and/or were not properly filled out, listings of checks were not
prepared, collection information was not entered timely into the
computer to produce Daily Summaries, and/or bank deposits could
not be verified.
Cashier Receipts. Section 310.3 of the Government Accounting
Manual requires that cashier receipts be issued in strict
numerical sequence and that no erasures or write-overs be made on
receipts. However, receipts were missing or were incomplete
and/or were not properly filled out as follows:
- At the Department of Finance, documents to support real
property tax collections of $15,848 could not be located.
- At the Records Division of the Virgin Islands Police
Department, 47 receipts for collections of $482 were not found.
- At the Department of Planning and Natural Resources, receipts
were incomplete and not properly filled out. For example, the
amount as written in words and in numbers was different on
Receipt No. 1002795, issued on May 24, 1999; the date was not
completed on Receipt No. 1003197, issued in June 1999; the dollar
amounts were not completed on Receipt Nos. 1004221 and 1004227,
issued on June 22, 1999; there were write-overs on Receipt No.
1004160, issued on June 22, 1999; and the dollar amount was not
written out on Receipt No. 1004622, issued on June 30, 1999.
- At the Department of Public Works, Receipt No. 0181874, issued
on May 16, 1999, was initially written for $3 and later changed
to reflect that $31 was collected.
Listings of Checks. Section 310.3 of the Government Accounting
Manual requires that a listing of checks accompany all deposits
that include checks. However, this requirement was not always
complied with by the Motor Vehicle Bureau and the Records
Division of the Police Department, the Department of Agriculture,
and the Department of Public Works. The collections of these
departments were processed on computerized cash registers (called
PC cash drawers), and officials of the departments said that
payments by check were identified on Workstation Summaries
printed from the computerized cash registers. However, the
Workstation Summaries showed only the total dollar amount of
checks received and did not include information such as check
number, date, payor, and amount. We found, during our audit,
that the collection process was being computerized at most
Governmental agencies. We believe, however, that unless the
computerized system can be reprogrammed to include detailed check
information on the Workstation Summaries, the listing of checks
required by the Government Accounting Manual should be maintained
because such detailed information about individual checks would
be needed to follow up on checks returned by banks for
insufficient funds that were received in payment of amounts owed
the Government.
Daily Summaries of Collections and Deposits. Section 310.5 of
the Government Accounting Manual requires that each collector
prepare a Daily Summary of Collections and Deposits, preferably
at the end of each workday but no later than the morning of the
first workday following the day of collection. The Daily
Summaries provide information on the sequence of cashier receipts
used and the distribution of collections by revenue account code
and also serve as a means of reconciling the daily amounts
collected and deposited. However, we found that departments and
agencies whose collection process had been computerized relied on
Daily Summaries of information entered into the system by the
agencies' collectors and printed at the Department of Finance.
We found that some agencies did not enter their collection and
deposit information into the computerized system on a daily basis
and that other agencies either did not pick up the Daily
Summaries from the Department of Finance or did not ensure that
the Department of Finance provided them with copies of the Daily
Summaries as follows:
- At the Department of Finance, 19 Daily Summaries for
collections of $735,200 were not available for our review. An
official of the Department's Revenue Collection Branch told us
that there was a backlog of 1 to 2 weeks in entering property tax
collection information into the computer.
- At the Department of Agriculture, collections of $474 for May
19, 20, and 24, 1999, and for June 17 and 18, 1999, were not
entered into the computer on the same day that they were
collected. Further, 10 Daily Summaries for collections of $1,900
were not available for our review because they had not been
forwarded to the Department of Agriculture by the Department of
Finance.
- At the Department of Licensing and Consumer Affairs, officials
told us that the computerized Daily Summaries were picked up each
day from the Department of Finance. However, 13 Daily Summaries
for collections of $123,400 could not be located; therefore, they
were not available for our review.
- At the Department of Labor, six Daily Summaries for collections
of $23,200 were not available for our review because they were
not forwarded by the Department of Finance.
We also found that the Roy L. Schneider Hospital did not report
collections of $984,000 on the Daily Summary of Collections and
Deposits for May 24, 1999. A Hospital official told us that
collections for that date were not reported to the Department of
Finance because that was the day on which the Hospital opened its
first bank account under new legislation that made it independent
from the Government's Executive Branch.
Certificates of Deposit. Section 310.4 of the Government
Accounting Manual requires that collectors prepare a Certificate
of Deposit (deposit slip) each time a bank deposit is made. The
amount of daily deposits should equal the amount of daily
collections. However, as shown in Table 1, we identified at
least 90 instances, totaling $42,232, in which there were
differences between daily collections and deposits.
Table 1. Summary of Differences Between Daily Collections and
Deposits for May and June 1999
------------------------------------------------------------
|Instances Error
|Agency Collections Difference* Rate
------------------------------------------------------------
Bureau of Internal Revenue 3$41,097,600.97$1,375.960.003%
------------------------------------------------------------
Department of Finance 1239,853,774.1616,961.010.043%
------------------------------------------------------------
Roy L. Schneider Hospital 63,312,331.915,975.12 0.180%
------------------------------------------------------------
Virgin Islands Lottery 151,427,176.258,266.26 0.579%
------------------------------------------------------------
Department of Labor 12 855,607.24 1,900.87 0.222%
------------------------------------------------------------
Virgin Islands Police 22 504,213.08 2,221.70 0.441%
Department
------------------------------------------------------------
Department of Planning & 5 390,858.68 1,167.00 0.299%
Natural Resources
------------------------------------------------------------
Department of Licensing & 6 343,685.09 2,380.84 0.677%
Consumer Affairs
------------------------------------------------------------
Department of Health 6 164,232.60 1,979.02 1.205%
------------------------------------------------------------
Department of Agriculture 3 5,577.30 4.10 0.074%
------------------------------------------------------------
Department of Public Works 0 2,191.00 0.00 0.000%
------------------------------------------------------------
Department of Human 0 0.000%
Services 1,025.00 0.00
------------------------------------------------------------
------------------------------------------------------------
Totals 90$87,958,273.28$42,231.880.048%
------------------------------------------------------------
__________
*Amounts shown are the total net value of the differences. That
is, some differences represented shortages of deposits to
collections, and other differences represented overages of
deposits to collections.
The circumstances of some of the differences noted in Table 1
were as follows:
- At the Virgin Islands Lottery, regular bank deposit slips were
used instead of the Government's Certificate of Deposit form.
However, deposit slips were not available for us to verify a
deposit of $6,040 for ticket sales on May 27, 1999, and deposits
of other collections totaling $1,934 in May and June 1999.
- At the Records Division of the Police Department, we could not
verify two deposits totaling $270 in June 1999 because the
validated Certificates of Deposit had not been picked up from the
bank.
- At the Motor Vehicle Bureau of the Police Department,
discrepancies totaling $1,470 existed because collections were
not entered into the computer on the day collected and because
the Bureau had a 2- to 3-week backlog of collections to be
entered.
- At the Department of Licensing and Consumer Affairs,
discrepancies totaling $2,381 existed because the amounts
reported on the Workstation Summary for particular days were not
deposited until the next day.
Although the error rates shown in Table 1 were very small,
especially for the Bureau of Internal Revenue and the Department
of Finance, we believe that the existence of differences totaling
$42,232 demonstrates that internal controls related to the
reconciliation of collections and deposits were not followed,
which provided the potential for funds to be misappropriated. We
believe that Governmental departments and agencies should ensure
that cashier operations are adequately supervised, monies
collected are properly documented and recorded using the
appropriate manual or computerized procedures, and daily
collections and deposits are reconciled.
Physical Security
Section 310.3 of the Government Accounting Manual requires that
every collector be provided with a vault or a safe to protect the
funds in his or her custody. However, at seven locations,[2] we
found that vaults or safes were not available to secure funds
which were kept on the premises overnight. Also, we found that
collections were not adequately safeguarded during the workday.
For example, at one location, the funds collected during the day
were left in an envelope on top of a desk, and at another
location, the funds collected during the day were kept in an
unlocked desk drawer. Further, collection areas were not
adequately secured to provide for the collectors' personal
safety. For example, the collectors at five locations did not
have secured booths or collection areas with restricted access.
At one of these locations, a secure area that had been used as a
cashier cage in prior years was used for storage.
We believe that Governmental departments and agencies should
ensure that funds in their possession during the workday or left
on premises overnight are properly safeguarded and that
collection personnel are provided with secure work areas which
restrict access by unauthorized personnel.
Bank Deposits
Section 310.4 of the Government Accounting Manual requires that
collectors deposit daily, through the use of night depositories,
all collections made by them during the day. However, this
requirement was not always complied with as follows:
- The Department of Agriculture did not deposit collections made
on June 17 and 18, 1999, until July 6, 1999.
- The Records Division of the Police Department and the Maternal
Child Health Division of the Department of Health made three
deposits up to 5 days after the dates of collections.
- The Department of Public Works made 21 deposits on Fridays,
which was 2 to 4 days after the dates of collections.
- The Bureau of Internal Revenue made four deposits up to 2 days
after the date of collection.
- The Instant Lottery office held collections for periods of up
to 17 days so that the funds could be used to make payouts to
instant lottery winners who came in to redeem their winning
tickets. An Instant Lottery official told us that holding the
collections was necessary because the $300 cash fund that was
available at the start of each business day was not sufficient to
make payouts, which averaged about $500 but could exceed that
amount. The official further stated that the Instant Lottery
office was trying to have the cash fund increased to $1,000.
In a related matter, we noted that the Instant Lottery office
issued packets of instant lottery tickets to retailers in advance
of receiving payments for the tickets. Specifically, during May
and June 1999, the Instant Lottery office distributed 850 packets
of instant lottery tickets, which were valued at $79,050, to
retailers. However, during the same period, the Instant Lottery
office collected from the retailers only $35,800 for tickets
distributed during those months and during prior periods. As of
August 10, 1999, retailers owed the Instant Lottery office
$51,300 for instant lottery tickets that they had received.
We believe that Governmental departments and agencies should
ensure that funds collected during each workday are deposited on
the date of collection, in accordance with Section 310.4 of the
Government Accounting Manual. We also believe that the Virgin
Islands Lottery should provide the Instant Lottery office with a
cash fund that is sufficient to meet its daily payout needs and
should discontinue the practice of distributing instant lottery
tickets to retailers in advance of receiving payments for such
tickets.
Collection Records
Section 310.5 of the Government Accounting Manual requires that
collectors submit the pertinent collection and deposit records to
the Revenue Audit Section of the Department of Finance on a daily
basis. (These records, consisting of copies of the issued and
voided cashier receipts, Daily Summaries of Collections and
Deposits,[3] and Certificates of Deposits, are used by the
Revenue Audit Section to verify the accuracy of reported
collections and deposits and to prepare daily and monthly revenue
reports.) However, we found that this requirement was not always
complied with. Specifically, the required records were not
submitted to the Department of Finance on a daily basis by the
Records Division of the Police Department; the East End Family
Health Center, the Revenue Services Division, and the Community
Health Clinic of the Department of Health; the Department of
Agriculture; and the Department of Planning and Natural
Resources. As a result, current and accurate information on the
revenues of the Government was not recorded in the Government's
Financial Management System and was not available to operating
and policy-making officials of the Government.
Unannounced Cash Counts
As part of our audit, we conducted unannounced cash counts at the
departments and agencies included in the scope of our review
except at the Virgin Islands Lottery's main office and Instant
Lottery office and the Department of Human Services. We were
unable to conduct cash counts at these three locations because
the Lottery's main office had not made any collections as of the
date and time of our unannounced visit, the Instant Lottery
office did not have cash on hand, and the Department of Human
Services collected only money orders and certified checks but not
cash. The results of our cash counts are summarized in Table 2.
Table 2. Results of Unannounced Cash Counts
for July and August 1999
Cash Receipts Change Cash
Agency Counted Issued Fund Over/(Under)
Police Dept. - Motor Vehicle Bureau $3,750.19 $3,561.11 $168.00
$21.08
Police Dept. - Records Division 829.00 829.00 0 0
Department of Agriculture 46.43 13.00 40.00 (6.57)
Department of Agriculture - Abattoir46.00 46.00 0 0
Department of Labor 5,135.65 5,135.56 0 .09
V.I. Lottery - Ticket Sales 24,280.00 24,280.00 0 0
Department of Finance 199,895.57 199,793.82 100.00 1.75
Department of Public Works 21.00 21.00 0 0
Dept. of Planning - Permits Division1,234.561,134.56 100.00 0
Dept. of Planning - Enforcement1,281.75 1,180.40 100.00 1.35
Dept. of Licensing 2,643.01 2,543.01 100.00 0
Dept. of Health - Maternal Health150.00 150.00 0 0
Dept. of Health - East End Center472.11 347.80 50.00 74.31
Dept. of Health - Revenue Services649.00 574.00 75.00 0
Dept. of Health - Community Clinic1,751.291,601.29 150.00 0
Roy L. Schneider Hospital 298,152.07 297,900.27 250.00 1.80
Bureau of Internal Revenue 687.34 647.34 40.00 0
Totals $541,024.97 $539,758.16 $1,173.00 $93.81
V.I. Lottery - Prize Payments$6,027.00 $1,973.00 $8,000.00** 0
__________
*The $8,000 in the column "Change Fund" was the amount of
start-up cash available for the payment of prizes. Cash on hand
and receipts for prizes paid totaled $8,000.
The collectors could not explain the reasons for the cash
differences at the Motor Vehicle Bureau of the Police Department
($21.08 overage) and the Department of Agriculture ($6.57
shortage). The collector at the Department of Labor said that a
customer did not pick up change of 9 cents. The collector at the
Enforcement Division of the Department of Planning and Natural
Resources said that the extra $1.35 was found under the cash pan.
The collector at the Department of Finance said that the change
fund has had an overage of $1.75 for a "long time." The
collector at the East End Family Health Center of the Department
of Health did not know how much start-up cash was in the cash
drawer at the start of the day and could not explain the $74.31
overage. The collector at the Roy L. Schneider Hospital could
not explain the overage of $1.80. Although the cash differences
identified were very minor amounts, we believe that a greater
level of supervisory oversight may have reduced the instances of
cash overages or shortages. Additionally, we believe that the
unreconciled overages are indicative of internal control
weaknesses that could result in more significant errors or
irregularities in the future.
Supervision
We found that the level of supervisory oversight over collectors
and assistant collectors was not adequate at all of the agencies
included in our review as follows:
- At the Motor Vehicle Bureau of the Police Department, the
Department of Agriculture, and the Department of Labor, the
supervisors did not review the collectors' work.
- At the Records Division of the Police Department, the collector
was also the supervisor of the Division. Therefore, no one
reviewed the collector's work before it was submitted to the
Department of Finance.
- At the Instant Lottery office, the staff consisted of only two
employees, one of whom was in charge of office operations.
However, collection records were not always reviewed by a
mid-level supervisor who had oversight of all office operations
before the records were submitted to the main Lottery office.
- At the Maternal Child Health Clinic of the Department of
Health, the collector's work had not been reviewed since August
1998, when the previous supervisor retired. The collector told
us that if she could not reconcile the collections and deposits,
she would ask a clerk to double-check her work.
- At the East End Family Health Center of the Department of
Health, the Center's accountant performed a cursory check rather
than a full reconciliation of the Daily Summaries and the
Certificates of Deposit.
We believe that Governmental departments and agencies should
ensure that the work of collectors and assistant collectors is
reviewed by supervisory personnel to make certain that the
collections and deposits are properly reconciled and that
pertinent requirements of the Government Accounting Manual have
been met before the collection documents are submitted to the
Department of Finance.
Computer Deficiencies
The Department of Finance provided computerized cash registers
(PC cash drawers) to the collectors at some departments and
agencies, including the Motor Vehicle Bureau of the Police
Department; the Bureau of Internal Revenue; and the Departments
of Agriculture, Labor, Finance, Public Works, and Licensing and
Consumer Affairs. However, we found that the computerized system
did not always provide needed printed reports and occasionally
printed inaccurate copies of the Workstation Summaries and Daily
Summaries of Collections and Deposits. For example, the
computerized system was not programmed to produce Daily Summaries
of Collections and Deposits to serve as records for the files for
days on which there were no collections. Also, the computerized
system sometimes duplicated collection amounts on the Workstation
Summaries and the Daily Summaries. For example, at the
Department of Agriculture, a collection of $82.20 that was made
on May 12, 1999, was listed on the computerized Daily Summaries
for both May 12 and 13, 1999. At the Department of Licensing and
Consumer Affairs, a collection of $7,732.51 that was made on June
30, 1999, was listed twice on that day's Workstation Summary.
This error occurred when the collector tried to print a second
copy of the Workstation Summary.
We believe that the Department of Finance should contact the
collectors who have been provided with computerized cash
registers to identify deficiencies in the computerized collection
system and ensure that these deficiencies are corrected.
Recommendations
We recommend that the Governor of the Virgin Islands require
Governmental departments and agencies to ensure that:
1. Employees who are assigned to make collections on behalf of
the Government are properly authorized by the Department of
Finance, in accordance with Section 310.2 of the Government
Accounting Manual.
2. Collectors and assistant collectors do not pre-sign blank
receipt forms or give unsigned receipts to individuals who make
payments.
3. An employee of the Department of Human Services is officially
designated, through the Department of Finance, as the collector
for license fees for the day care, preschool, and Headstart
programs.
4. Cashier operations are adequately supervised, monies
collected are properly documented and recorded using the
appropriate manual or computerized procedures, and daily
collections and deposits are reconciled.
5. Funds in the possession of the collectors during the workday
are properly safeguarded and that collection personnel are
provided with secure work areas which restrict access by
unauthorized personnel.
6. Funds collected during each workday are deposited on the date
of collection, using night depositories when necessary.
7. The Virgin Islands Lottery provides the Instant Lottery
office with a cash fund that is sufficient to meet its daily
payout needs and discontinues the practice of distributing
instant lottery tickets to retailers in advance of receiving
payments for such tickets.
8. Adequate supervisory oversight is provided over collectors
and assistant collectors so that collections and deposits are
properly reconciled and pertinent requirements of the Government
Accounting Manual are met before the collection documents are
submitted to the Department of Finance.
9. The Department of Finance contacts the collectors who have
been provided with computerized cash registers (PC cash drawers)
to identify and correct, as appropriate, deficiencies in the
computerized collection system.
Governor of the Virgin Islands Response and Office of Inspector
General Reply
On September 15, 1999, we provided a preliminary draft of this
report to the Commissioner of Finance, requesting an exit
conference to discuss the report. However, despite several
followup inquiries, we were unable to schedule an exit conference
with the Commissioner. Therefore, the draft report was issued on
October 7, 1999, without the Commissioner's comments on the
findings and recommendations. A response to the draft report was
requested by November 30, 1999, but a response from the Governor
of the Virgin Islands or the Commissioner of Finance had not been
provided as of December 15, 1999. Therefore the recommendations
are unresolved (see Appendix 2).
Section 5(a) of the Inspector General Act (Public Law 95-452, as
amended) requires the Office of Inspector General to list this
report in its semiannual report to the U.S. Congress.
In addition, the Office of Inspector General provides
audit reports to the Congress.
**FOOTNOTES**
[1]:A Certificate of Deposit is an official Government of the
Virgin Islands form that is used in lieu of a bank deposit slip.
[2]:A list of locations where physical security was inadequate
was provided to the Governor of the Virgin Islands in a separate
letter.
[3]:The Daily Summaries of Collections and Deposits include
manually prepared Daily Summaries and the entry of collection and
deposit information into the computerized system so that
computer-generated Daily Summaries can be printed at the
Department of Finance.
In view of the above, please provide a response to this report by
February 4, 2000. The response should be addressed to our
Caribbean Office, Federal Building - Room 207, Charlotte Amalie,
Virgin Islands 00802. The response should provide the
information requested in Appendix 2.
Sincerely,
Earl E. Devaney
Inspector General
APPENDIX 1
OFFICES AND COLLECTIONS INCLUDED IN SCOPE OF AUDIT
Department or Agency* Collections Reviewed
Bureau of Internal Revenue $41,097,600.97
Department of Finance 39,853,774.16
Roy L. Schneider Community Hospital 3,312,331.91
Virgin Islands Lottery:
Ticket Sales Office 1,412,300.25
Instant Lottery Office 45,117.52**
Main Office 14,876.00
Department of Labor 855,607.24
Virgin Islands Police Department:
Motor Vehicle Bureau 477,968.08
Records Division 26,245.00
Department of Planning and Natural Resources:
Permits and Enforcement Division 390,858.68
Department of Licensing and Consumer Affairs 343,685.09
Department of Health:
Community Health Clinic 90,636.69
Revenue Services Office 44,569.86
East End Family Health Center 16,452.05
Maternal Child Health Center 12,574.00
Department of Agriculture:
Abattoir 5,577.30
Department of Public Works 2,191.00
Department of Human Services 1,025.00
Total Collections Reviewed $88,003,390.80
__________
*All offices visited were on the island of St. Thomas.
**This amount was not included in Table 1 in the report because
it contained a combination of collections from instant ticket
sales and payments of instant lottery prizes and was therefore
not easily reconcilable to daily deposits.
APPENDIX 2
STATUS OF AUDIT REPORT RECOMMENDATIONS
-----------------------------------------------------------
Finding/Recommendation
Action Reference Status Required
1 through 9 Unresolved.Provide a response to each
recommendation indicating concurrence or nonconcurrence. If
concurrence is indicated, provide a plan identifying
actions to be taken, including target dates and titles of the
officials responsible for implementation. If nonconcurrence is
indicated, provide specific reasons for the nonconcurrence.
-----------------------------------------------------------
ILLEGAL OR WASTEFUL ACTIVITIES SHOULD BE REPORTED
TO THE OFFICE OF INSPECTOR GENERAL BY:
Sending written documents to:
Within the Continental United States
U.S. Department of the Interior
Office of Inspector General
1849 C Street,N.W.
Mail Stop 5341
Washington, D.C. 20240
Calling:
Our 24 hour
Telephone HOTLINE
1-800-424-5081 or
(202) 208-5300
TDD for hearing impaired
(202) 208-2420 or
1-800-354-0996
Outside the Continental United States
Caribbean Region
U.S. Department of the Interior
Office of Inspector General
Eastern Division- Investigations
1550 Wilson Boulevard
Suite 410
Arlington, Virginia 22209
Calling:
(703) 235-9221
North Pacific Region
U.S. Department of the Interior
Office of Inspector General
North Pacific Region
238 Archbishop F.C. F'lores Street
Suite 807, PDN Building
Agana, Guam 96910
Calling:
(700) 550-7428 or
COMM 9-011-671-472-7279